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Greece took a major step forward last week to restructure its debt, but it is unlikely the country will be able to service that debt in the longer term.

Defaulting on 100 billion euros ($131 billion) of debt will still leave Greece's sovereign-debt load at 120% of gross domestic product as far out as 2020. That would be better than today's 165%, but no cause for comfort. Given the Greeks' distaste for austerity, it remains likely the country will leave the euro zone.

In a deal unveiled Friday, private-sector investors who own 83.5% of Greek government bonds agreed to tender their bonds in exchange for new ones of less than half the value, resulting in a 53.5% haircut for creditors. The deal was termed a "restructuring credit event" by the International Swaps and Derivatives Association, which triggered $3.2 billion in credit-default swaps. The ISDA ruled late Friday on a complaint by bondholders; its decision, which was expected, isn't likely to rattle the market.

Elsewhere, the rally in government bonds sparked by the European Central Bank's long-term refinancing operation will continue. Yields on Italian and Spanish government bonds have fallen sharply this year, although the pace of declines slowed in recent weeks. The Stoxx Europe 600 index closed Friday at 265.44 points, down 0.7% on the week.

AS THE SPRING PLANTING SEASON begins, thoughts turn to fertilizer. Shares of fertilizer companies have produced a bumper crop of losses for investors in the past year, but that could change in the year ahead. In particular,
Israel Chemicals
(ticker: ICL.Israel), the world's sixth-largest potash producer, looks ripe for a rally. Its shares are down 28% in the past 12 months, to 3,930 shekels (about $1,038), but some see the stock rebounding by 50%. If that's not enough, investors also can harvest a 7% dividend yield. ICL trades for 8.7 times this year's expected earnings, compared with a price/earnings multiple of 11.5 times for
Potash Corp. of SaskatchewanPOT -1.8363939899833055%Potash Corp. of Saskatchewan Inc.U.S.: NYSEUSD35.28
-0.66-1.8363939899833055%
/Date(1425413316533-0600)/
Volume (Delayed 15m)
:
1835128
P/E Ratio
17.45215370159735Market Cap
37458378591.568
Dividend Yield
4.307169169736469% Rev. per Employee
1571640More quote details and news »POTinYour ValueYour ChangeShort position
(POT) and 10.7 times for
MosaicMOS -1.2762762762762763%Mosaic Co.U.S.: NYSEUSD52.6
-0.68-1.2762762762762763%
/Date(1425413303161-0600)/
Volume (Delayed 15m)
:
1416780
P/E Ratio
19.464814814814815Market Cap
19583631296.5865
Dividend Yield
1.9027685282085434% Rev. per Employee
995143More quote details and news »MOSinYour ValueYour ChangeShort position
(MOS), two large North American fertilizer concerns.

Tel Aviv-based ICL generates about half its revenue from fertilizer, extracting potash from the Dead Sea and phosphate rock from the Negev Desert under licenses and concessions from the Israeli government. The remainder comes from businesses that make use of other minerals or byproducts, such as bromide, that are refined for commercial applications.

ICL is expected to benefit from high prices for agricultural commodities, and advances in emerging markets. After a period of weakness late last year, demand for ICL's fertilizers is picking up again.

ICL is due to report 2011 results March 27. Analysts expect that the company earned $4.56 per share, compared with $2.87 in 2010. Earnings in 2012 could dip to $4.43, however, as ICL agreed to fund a $1 billion cleanup of salt deposits on the Dead Sea floor, and to pay higher royalties on the potash it extracts.

Potash Corp. owns 13.85% of ICL, and reportedly is keen to raise its stake. That could reduce the company's public float, now 33.85% of shares outstanding, and force shares higher. ICL's biggest shareholder is
Israel Corp.
(ILCO.Israel), with a 52.3% interest.

ICL paid a special dividend of $500 million last year, and has a solid dividend history. Credit Suisse rates the stock Overweight, with a price target of ILS5,940.

Falling

Despite steps to at least postpone a Greek disaster, most European marts fell last week.